Counties, state making progress over Medicaid billing problem; lawsuit still looms

TALLAHASSEE — County officials across Florida say they appreciate a new level of openness with the state regarding a long-running dispute about unpaid Medicaid bills.

But for most it's too little, too late.

Broward County Commissioner Lois Wexler said she spent two years meeting with Agency for Health Care Administration officials about the error-prone billing system that caused the county to question a chunk of the bills it received. But nothing ever got done, and Broward's backlog grew by tens of millions.

Now, the state wants counties to pay up and erase the backlog. Gov. Rick Scott signed into law new rules that require counties pay the state most of the disputed amount, $325.5 million.

But the governor also told AHCA it needed to do a better job determining what counties truly owe while addressing the issues that caused the huge backlog in the first place. The counties should pay the state what they owe, Scott said when he signed the law in March, but not a penny more.

Even with those assurances, 53 counties and the Florida Association of Counties are suing the state to stop the collections. Wexler said recently she isn't convinced that more conversations with AHCA will be enough to solve the problem.

"I did this," she said. "I went down this road before. We've had these conversations. We brought the documentation. We brought the data."

Florida's $20 billion Medicaid program is paid for using a mix of federal, state and county dollars. In recent years, however, counties have labeled more and more of the bills they received as incorrect, duplicative, or referencing people who live elsewhere.

That resulted in the $325.5 million backlog that the state believes counties owe. The new law requires counties to pay at least 85 percent of the disputed amounts, and it also withholds revenue-sharing dollars for future Medicaid costs.

Counties lobbied unsuccessfully for Scott to veto the measure, which contains several other less controversial provisions. Instead, he directed AHCA to meet with each of the state's 67 counties in hopes of coming to an agreement about what is owed.

Most of these meetings have already taken place. Meetings in Pinellas and Hernando counties are scheduled this week.

As a result of the discussions, AHCA has granted counties flexibility under the new law. If they pay the amounts they owe by a certain deadline each month, their revenue-sharing dollars won't be withheld. Most counties have indicated they will take this route, allowing them to continue paying Medicaid dollars as they did before the law went into effect.

AHCA also worked out an agreement with the Department of Children and Families to provide counties access to the program used to register people for Medicaid. That new access should help counties cross-reference bills, correct misinformation and identify errors.

Counties are thankful for the changes but say they do not negate the unfairness of the law, a spokeswoman for the Florida Association of Counties said.

"As much as we appreciate the governor's efforts, legislation still ties their hands to some pretty key issues," said Cragin Mosteller of the FAC.

The lawsuit alleges that the state's decision to withhold revenue-sharing dollars from counties for both the Medicaid backlog and future bills is a violation of the "unfunded mandate" provision in the state Constitution.

It also asserts that the backlog is outside of the statute of limitations for Medicaid bills, because counties are only required to maintain records for four years. The state wants counties to pay for disputed bills dating as far back as 2001.

Counties say their criticism of the billing system increased in 2008 when the state switched to a new program that caused the error rate to balloon.

For example, officials in Alachua County say the county gets a high number of incorrect bills because it's at the top of a pull-down menu that lists counties alphabetically. Manatee County has complained it gets bills for residents living in Sun City Center, which is in Hillsborough.

During the meeting in Broward earlier this month, AHCA shared the results of its investigation of a random sample of 100 of the nearly 90,000 records tied to that county's backlog. The agency determined that 21 of the sampled bills were the responsibility of another county, and it couldn't make an initial determination for another 24.

Only 55 of the 100 bills were certified that Broward County owes the money.

That doesn't inspire confidence in the system or make counties want to agree to the state's plan, which would require them to pay back 85 percent of the backlog.

"The reason why the counties didn't think that was a good deal was because AHCA's own investigation shows that we don't owe anywhere near 85 percent of the backlog," said Gretchen Harkins, Broward County director of intergovernmental affairs.

AHCA said counties shouldn't read too much into the results of this small sampling of data, which was used to fine-tune the certification process not indicate how many of the bills are valid.

It was initially estimated that counties would be forced to pay the state $77.5 million during the 2012-13 fiscal year to cover the backlog. Because of Scott's decision that counties won't have to pay anything that isn't proven and agreed upon, that amount could be much lower.

But that doesn't worry the governor who believes the difference won't have a "material impact" on the budget, a spokeswoman said Thursday.

"Gov. Scott believes that all parties agree that legitimate financial obligations should be paid," deputy press secretary Jackie Schutz said, "and as we have stated before, AHCA will only certify billings to counties that are accurate and valid."

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